NORWAY Law and Practice Contributed by: Ida Marie Windrup, Daniel Jovanovic, Markus Nilssen and Steffen Rogstad, BAHR
ing requirement (such as reverse solicitation) to pro - vide loans in Norway – see 2.1 Regulators of Private Credit Funds . The regulatory regime also translates into lack of knowledge of alternative financing sources for Nor - wegian borrowers, who have traditionally sought out their local banks when capital was required. With the increase in PE-owned businesses, however, this is changing and the opportunities for the first movers in Norway are significant. 1.5 Sponsored/Non-Sponsored Debt Private credit providers in Norway focus primarily on private equity sponsors and their portfolio companies, though there is growing activity in providing capital to founder-owned companies. The sponsor-backed market remains the primary focus due to established relationships and deal flow, and real estate companies struggling to attract bank financing are also an impor - tant component. 1.6 Recurring Revenue Deals and Late-Stage Lending The Norwegian market for recurring revenue-based financing remains relatively nascent compared to more mature markets such as the USA and UK, though it has shown steady development over the past few years. While traditional bank lending contin - ues to dominate the Norwegian financing landscape, there is growing awareness and adoption of alterna - tive financing structures, particularly among technol - ogy companies and subscription-based businesses. 1.7 Deal Sizes, Fund Sizes and Fundraising The typical size of private credit transactions in Nor - way ranges between USD50 million and USD250 mil - lion, however, larger deals of up to USD400 million have been seen. 1.8 Impending Regulation and Reform There is no proposal to repeal or significantly amend the scope of the credit licensing regulations in Nor - way. However, over the next few years Norway will implement the ELTIF 2.0 and AIFMD 2.0 regulations, which provide additional avenues for certain direct lenders to provide credit in a regulated capacity.
The Norwegian regulator has not traditionally priori - tised supervision of private credit lending to sophis - ticated corporate borrowers, and there are no recent precedents where the regulator has cracked down on a direct lender due to alleged breaches of licensing requirements. 2. Regulatory Environment 2.1 Licensing and Regulatory Approval Lending constitutes a licensable financing activity in Norway, which means that non-bank lenders must rely on an exemption from the licensing requirement to provide loans in Norway. The most common exemp - tion is reverse solicitation, where loans are provided solely on a Norwegian borrower’s own initiative, with - out the lender having marketed or recommended the loan to the specific borrower or to the general Norwegian public in advance. Another exemption is where the loan is structured as debt securities, since purchasing debt securities is exempted from the regu - latory restrictions. In addition, the implementation of EU financial markets legislation through Norway’s participation in the EEA means that EU-regulated credit funds are slowly mak - ing their way onto the Norwegian market. On 1 Janu - ary 2023, the Norwegian credit licensing regime was amended to cater for the establishment of ELTIFs in Norway, as well as recognition of EEA-based ELTIFs. Foreign lenders do not require a licence to take the benefit of security over assets located in Norway, pro - vided they are not actively conducting a lending busi - ness in Norway that would trigger licensing require - ments. 2.2 Regulators of Private Credit Funds The primary regulator for private credit activity in Nor - way is the Norwegian Financial Supervisory Authority ( Finanstilsynet ). Finanstilsynet oversees compliance with licensing requirements and financial regulations applicable to lending activities in Norway. 2.3 Restrictions on Foreign Investments The Norwegian National Security Act (the “Security Act”) requires certain acquisitions to be notified to
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